Foreclosures Soar in March,
Up 44 Percent Over February’s High
April 15, 2009
Completed foreclosures hit another monthly record in March as 175,199
homes were lost to foreclosure, up 44 percent from February’s record high, according
to the latest U.S. Foreclosure Index released today by ForeclosureS.com, a leading
real estate information provider.
The number of foreclosed properties was up dramatically from 121,756
in February. Nearly 370,000 properties have been repossessed by lenders so far
this year – 18.3 of every 1,000 households – up more than 38 percent from 266,986
in the fourth quarter of 2008, the U.S. Foreclosure Index shows, and up 76 percent
from 210,280 in the first quarter of 2008.
The first-quarter 2009 total is the highest quarterly total of completed
foreclosures since the foreclosure crisis began. Pre-foreclosure filings – filings
that could lead up to a completed foreclosure – also reached their highest quarterly
level, topping 600,000 for the first time since the foreclosure crisis began.
While February and March headlines boasted of government efforts
to stop foreclosures, in fact March was the first month when major government-backed
lenders – including Fannie Mae and Freddie Mac – lifted moratoria on many properties
in the first week of March. Only properties eligible for modification under
the Obama administration’s plan were covered by continuing foreclosure moratoria,
according to statements by the two agencies.
“The floodgates of foreclosure opened with the expiration of these
foreclosure freezes,” says Alexis McGee, foreclosure expert, educator, and author.
“With rising unemployment, a backlog of delayed foreclosures and increasing
abandonment of properties, foreclosures soared in March to levels we have not
seen in this crisis.”
“Hopefully, this is a short-term surge caused by months of delayed
foreclosures. This is a very troubling turn after seeing some bright spots earlier
this year. However, with Obama’s new Making Homes Affordable Plan now in effect
we are hoping that in the near future we will see a reduction in new pre-foreclosure
filings, which will help stabilize the housing markets,” McGee said.
“March’s high numbers may also be caused by defaults on previously
modified loans. Earlier this month the Office of the Comptroller of the Currency
and the Office of Thrift Supervision reported higher and rising re-default rates
on modified mortgages as part of their fourth-quarter 2008 report,” McGee added.
“The report points to the fact that not all previously modified loans result
in lower monthly payments, and when combined with today’s economics, the result
can be catastrophic for already strapped homeowners.”
The Obama administration’s Making Home Affordable Plan is intended
to help promote loan modifications by bringing debt-to-gross income ratios down
to 31 percent. In short, that would allow homeowners to only spend 31 percent
of their income on the mortgage, including taxes. With such low payment levels
– compared to 50 percent payments as the recent norm of banks – people who get
their loans modified under the new plan will be far more likely to remain in
California led the nation in number of foreclosures last month —
38,318, up more than 59 percent from February, the U.S. Foreclosure Index shows.
“But the state also is a leader in the housing recovery,” says McGee,
“and mixes the good with the troubling news. It’s indicative of what’s beginning
to happen in states across the country.”
Consider a few numbers from the California Association of Realtors:
single-family home sales in the state increased 83 percent in February to
a seasonally adjusted rate of 620,410 on an annualized basis.
statewide median price of an existing single-family home decreased 40.8 percent
in February to $247,590.
- CAR’s Unsold Inventory Index fell
to 6.5 months in February, compared with 15.3 months in February 2008.
median number of days it took to sell a single-family home declined to 51.5
days in February 2009, compared with 69.3 days in February 2008.
The U.S. Foreclosure Index ranks Florida No. 2 nationally in March
foreclosure numbers, with 18,946 foreclosures, up 33 percent from February.
Similarly the Florida Association of Realtors reports solid housing economic
Existing home sales in that state rose 20 percent in February over
a year ago, the sixth month in the row with year over year increases.
statewide existing home sales were 16.7 percent higher than January’s statewide
sales of existing condominiums rose 15 percent in February over a year ago,
with sales also up 25.1 percent over January.
median sales price for existing homes last month was $141,900, down 29 percent
from a year ago.
Even in an economically hard-hit state like Michigan where the unemployment
rate is among the highest in the nation, and March foreclosures top 11,000 (up
25.6 percent from February), the Michigan Association of Realtors reports year-over-year
home sales up 3.5 percent in February. Average home prices were down nearly
30 percent, too.
For the quarter, 604,590 pre-foreclosure filings occurred nationwide,
up 14.5 percent from 528,241 in the fourth quarter of 2008 and up 17.3 percent
from 515,411 in the first quarter of 2008. The quarterly pre-foreclosure filings
are also the highest quarterly numbers since the foreclosure crisis began.
Annualizing that number, the U.S. is on track to top 2.4 million
pre-foreclosure filings before year-end.
California had the most pre-foreclosure filings, followed closely
by Florida, in March. Over the last six months, however, Florida has had the
most pre-foreclosure filings, followed by California, Arizona, Illinois and
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